ESR/2015/1758 Financial assurance under the Environmental ... · Guideline Financial assurance under the Environmental Protection Act 1994 Page 2 of 33 • ESR/2015/1758• Version

Guideline

Page 1 of 33 • ESR/2015/1758• Version 3.00 • Effective: 4 MAR 16 ABN 46 640 294 485

Financial assurance under the Environmental Protection Act 1994

This guideline describes the arrangements for financial assurance under the Environmental Protection Act 1994. It has been

prescribed under the Environmental Protection Regulation 2008. The publication number of this guideline was formerly EM1010.

Table of contents

1. Introduction .................................................................................................................................... 3

Financial assurance ....................................................................................................................... 3

How financial assurance is imposed .............................................................................................. 3

The purpose of this guideline ......................................................................................................... 3

Further information ........................................................................................................................ 3

2. Governing legislation and policy .................................................................................................. 4

Ability to require financial assurance .............................................................................................. 4

Circumstances when financial assurance can be required ............................................................. 4

Setting the amount and form of financial assurance ....................................................................... 5

When financial assurance must be given ....................................................................................... 5

Relationship to security required under other Acts ......................................................................... 6

3. Deciding the amount and form of financial assurance ............................................................... 7

Application stage ........................................................................................................................... 7

Decision stage ............................................................................................................................. 10

Criteria for deciding the amount and form of financial assurance ................................................. 10

The form of financial assurance ................................................................................................... 10

Lodgement for mining activities .................................................................................................... 11

Lodgement for other resource activities ....................................................................................... 11

Lodgement for prescribed ERAs .................................................................................................. 11

4. Amending the financial assurance by application .................................................................... 12

(i) How to apply to amend the amount or form of FA .................................................................... 12

(ii) Information requirements ........................................................................................................ 12

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Page 2 of 33 • ESR/2015/1758• Version 3.00 • Effective: 4 MAR 16 Department of Environment and Heritage Protection

(iii) Compliance statements .......................................................................................................... 13

Decision stage ............................................................................................................................. 13

Criteria for deciding an application to amend FA .......................................................................... 13

5. Requirement to change or replenish the financial assurance .................................................. 14

Notification and submissions stage .............................................................................................. 14

Administering authority can change the amount of FA required ................................................... 14

Administering authority can require FA to be replenished ............................................................ 15

6. Discharging financial assurance ................................................................................................ 16

Application stage ......................................................................................................................... 16

Holder can apply to discharge FA ................................................................................................ 16

Compliance statements ............................................................................................................... 16

Decision stage ............................................................................................................................. 16

Criteria for deciding an application to discharge FA ..................................................................... 16

Discharge FA ............................................................................................................................... 17

Notification ................................................................................................................................... 17

7. Claiming financial assurance ...................................................................................................... 18

8. Financial assurance for transitional environmental programs ................................................ 19

Requirement for TEP ................................................................................................................... 19

Discharge FA ............................................................................................................................... 19

9. Glossary ....................................................................................................................................... 20

Appendix A – Approved calculation method ................................................................................. 24

Appendix B – Discount system ...................................................................................................... 28

Guideline



1. Introduction

Financial assurance

Financial assurance (FA) is a type of financial security provided to the Queensland Government by the holder of an

environmental authority (EA) 1. FA may be required as a condition of an EA or a transitional environmental program

(TEP) under the Environmental Protection Act 1994 (EP Act).

FA provides the government with a financial security to cover any costs or expenses incurred in taking action to

prevent or minimise environmental harm or rehabilitate or restore the environment, should the holder fail to meet

their environmental obligations in the EA or TEP. Providing FA to the government does not relieve an EA holder of

any obligation under other legislation (e.g. delivering an offset under the Environmental Offsets Act 2014).

How financial assurance is imposed

The guideline sets out two ways in which FA requirements may be imposed:

through a condition of an EA

through a condition of a TEP.

The purpose of this guideline

This guideline outlines the relevant legislative provisions, the circumstances when FA may be required, the form of

FA, the approved calculation method, application requirements, decision-making criteria and other matters such as

lodging, changing, discharging or claiming FA. This guideline has been prescribed in the Environmental Protection

Regulation 2008. This guideline is for:

new operators who are applying for a new EA and are giving FA for the first time

existing EA holders who apply to amend/replace their plan of operations or are changing their level of

significant disturbance resulting in a change to the FA

existing EA holders who apply to transfer the EA (or tenure) to a new holder

existing EA holders who apply to surrender the EA

existing EA holders who have a TEP

departmental staff administering the FA provisions

members of the public interested in learning more about the regulatory framework for FA.

All references to FA in this guideline refer to the EP Act only, unless otherwise stated. Flowcharts appear

throughout the document in order to provide more guidance on FA processes. Unless specified, any reference to a

timeframe in the flowcharts is a reference to a timeframe that is set by legislation. This guideline does not deal with

residual risk payments, which may be associated with progressive rehabilitation, surrender applications or site

management plans for contaminated land.

Further information

Contact your project manager for further advice or for general enquiries, please contact Permit and Licence

Management (PaLM).Information is also available on the Queensland Government Business and Industry Portal at

http://www.business.qld.gov.au/business/running/environment/licences-permits/financial-assurance-

rehabilitation/financial-assurance-security-deposit.

1 Throughout this document, italicised words appear in the dictionary at the end of this guideline. Only the first expression of the

word will be italicised. Note: some words are italicised because they refer to titles of legislation.

http://www.business.qld.gov.au/business/running/environment/licences-permits/financial-assurance-rehabilitation/financial-assurance-security-deposit


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2. Governing legislation and policy

Ability to require financial assurance

The administering authority2 (from herein, the department) may, by condition of an EA, require the holder to give FA

before the relevant activity is carried out. There are also circumstances throughout the life of the EA when the FA

will need to be reviewed and amended. FA may also be discharged at the conclusion of activities and at the time of

surrendering the EA, subject to successful rehabilitation. However the department may, after approving the

surrender of an EA, require that the FA remains in force until it is satisfied that no claim is likely to be made. Refer

to section 292 of the EP Act. It may otherwise require a residual risk payment as per section 271 of the EP Act.

Circumstances when financial assurance can be required

The department, when making a decision about an EA, must consider whether to impose a condition requiring FA,

having regard to the EP Act.

The circumstances where FA is or may be required are outlined below:

Resource Activities

FA is required for the following resource activities, where the activity will result in significantly disturbed land:

all mining claims; exploration permits; mineral development licences and mining leases authorised under

the Mineral Resources Act 1989 (MR Act) (note: for small scale mining activities, the required amount of

FA is prescribed in the EP Regulation. An information sheet for small scale miners (EM1120) can be found

at the EHP website www.ehp.qld.gov.au.

all authorities to prospect, petroleum leases and petroleum pipeline licences authorised under the

Petroleum and Gas (Production and Safety) Act 2004 (P&G Act) or the Petroleum Act 1923. Petroleum

survey licences may require FA if significant disturbance to land is authorised by the tenure (Note: Data

acquisition authorities do not require FA).

other resource activities where an EA is required under the Greenhouse Gas Storage Act 2009 and the

Geothermal Energy Act 2010.

Prescribed Environmentally Relevant Activities

FA may be required for any prescribed Environmentally Relevant Activities (ERA) where the activity will result in

‘significantly disturbed land’. However, if a prescribed ERA is an authorised ancillary activity under an EA for a

resource activity the FA is taken to be calculated under the resource EA and it is not required again. The following

prescribed ERAs are likely to requireFA:

2 The administering authority is the Department of Environment and Heritage Protection (the department). Note that the

Department of Natural Resources and Mines (DNRM) manages some aspects of FA on behalf of the department. These are

administrative only and the role of NRM is clarified throughout the guideline.

Description of activity List of activities to consider for FA

Oil refining or processing ERA 11(b) and 11(c)

Dredging and extracting activities ERA 16(1a to 1d) and ERA 16(2a to 2c)

Metal smelting and refining ERA 30(c) and ERA 30(d)

Mineral processing ERA 31 (1-2(b))

http://www.ehp.qld.gov.au/

Guideline



When deciding whether to require FA for prescribed ERAs, the department will consider matters including: the

nature and location of the proposed activity; longevity of the project; likelihood of action being required to

rehabilitate or restore the environment because of environmental harm caused by the activity; and the

environmental performance of the operator. It is important to note that FA may be required regardless of underlying

land tenure (i.e. freehold, leasehold etc). The department does not typically require that local governments provide

FA. An operator should discuss the need for FA as early as possible with the department in a pre-lodgement

meeting.

Setting the amount and form of financial assurance

The department must decide the form and amount of FA required. Refer to section 295 of the EP Act. The EA

holder will propose the amount of FA in a plan of operations for mining and petroleum lease projects or via an

application process for other activities. The amount of FA should be based on the potential cost to government of

having to undertake works and cannot exceed the total or likely costs to rehabilitate or restore and protect the

environment. The proposed amount may take into account any discounts being applied for, if applicable. Therefore,

the total rehabilitation liability should be calculated by subtracting the proposed discount amount from the 100%

rehabilitation liability amount. For full details of how the proposed FA amount should be calculated, refer to

Appendix A—Approved calculation method—other environmentally relevant activities and Appendix B—Discount

system.

When financial assurance must be given

For new EA holders, operators with a condition requiring FA to be given will be able to first obtain the EA and then

give their FA at a later stage, via a separate application process. This allows the EA holder to finalise matters such

as tenure approval and to progress financial decisions whilst simultaneously settling the amount of FA. Carrying out

activities on land without first giving FA to the department may be treated as a breach of the EA condition, could

attract fines or prompt government action to suspend or cancel the EA. Refer to sections 430 and 278 of the EP

Act.

For new EA holders, arising from a transfer/change in tenure holder, FA must be given before the activity is

carried out. This may require the operator to give FA prior to any transfer application being approved. Refer to

section 293 of the EP Act for the penalty if the new holder carries out, or allows to be carried out, the activity before

FA is given to the department. The department may require the new holder to give FA before discharging the FA to

the former EA holder.

Existing EA holders may need to amend or change the amount of FA if the level of disturbance has changed (e.g.

in response to an amended or replacement plan of operations). For EA holders with FA that has been discounted in

accordance with Appendix A, an FA amendment should also be sought where (a) the holder can no longer meet

their discount obligations; or (b) at the end of the nominated FA period/plan of operations period, whichever occurs

sooner. Refer to Appendix B – Discount system, for further details. The replacement documentation should propose

the ‘revised amount’ and the department will review and require any changes after that. So long as FA is already

Regulated waste recycling or reprocessing ERA 55(2)

Regulated waste storage ERA 56

Regulated waste treatment ERA 58

Waste disposal ERA 60(1a to 1d) and ERA 60(2d to 2h)

Clinical and regulated waste incineration and

thermal treatment

ERA 61(3a) and ERA 61(3b)

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held, the operator will not need to ‘stop’ operations and the department can nominate any date for when the

requirement takes effect. Refer to section 306 of the EP Act.

Note: statutory timeframes apply to some aspects of the process and these are outlined in the relevant sections

and/or reflected in the flowcharts throughout this guideline.

Relationship to security required under other Acts

The government may require security or FA for a range of matters under Queensland legislation. This guideline

does not deal with security requirements which are administered by other government departments and required

under other Queensland statutes. It does not duplicate security or FA held for any other purpose. For further

information on DNRM securities, please refer to the DNRM publication Collection of Security Guide.

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3. Deciding the amount and form of financial assurance

Figure 1: Process for providing financial assurance

Application stage

(i) How to apply for a decision about the amount and form of financial assurance

There are two pathways, depending on the type of activity:

1. For mining and petroleum leases that require a (new or amended) plan of operations, the proposed

amount of FA must be included in the rehabilitation program which forms part of the plan of operations,

which is submitted to the department prior to commencing activities. The plan of operations should be

lodged with the relevant regional office for the EA.

2. All other ERAs (including prescribed ERAs and all other resource activities that do not require a plan of

operations) must make an application to the department for a decision on the amount and form of FA (the

application process). The application must be made (at any time after the EA has been granted) in the

approved form, Application for a decision about the amount and form of financial assurance payable

(EM910), and meet the minimum information requirements set out below. The application should be lodged

with the relevant regional office for the EA. Note: for mining activities relating to a mining claim, exploration

permit or mineral development project and which operate under standard conditions, the Standard

application for a new environmental authority for a resource activity (EM1280) is taken to include an

application for the amount and form of FA.

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(ii) Information requirements

For activities submitting FA via a plan of operations—refer to sections 288 or 289 of the EP Act for information

requirements. The EA holder must submit the plan of operations containing the calculation of FA to the department

at least 20 business days (or agreed shorter period) before carrying out activities covered by the plan. The FA

should be calculated in accordance with Appendix A.

For activities proposing FA via an application process, refer to the following information requirements that must

be included in an application (as per section 294 of the EP Act):

(a) detailed explanation of disturbance (including scale/area of disturbance and original land use)

(b) rehabilitation program (including the nature, staging and areas of proposed rehabilitation works including

proposed rehabilitation techniques, justification for these techniques, final landform and final land use)

(c) list of published standards, performance indicators or acceptance criteria that underpin the rehabilitation

activities and any other assumptions used to calculate the FA

(d) list of third party suppliers (including business name and contact details) who have supplied the quotes or

contracted rates.3

(e) state the proposed amount and time period for the FA (must not be more than five years)

(f) supporting information to show how FA has been calculated, such as the electronic worked version of the

FA calculator and background calculations,or, if applicable, the Schedule of Disturbance (available on the

Queensland Government Business and Industry Portal at

http://www.business.qld.gov.au/business/running/environment/licences-permits/financial-assurance-

rehabilitation/financial-assurance-security-deposit).

(g) if applicable, information required in order to demonstrate eligibility for a discount, including any necessary

declarations, reports and/or other supporting documentation (refer to Appendix B).

If the approved form is incomplete or the application does not include the above minimum information requirements,

the department may not accept the application, in which case the application will be returned without assessment.

(iii) Calculating financial assurance

For small scale mining activities, the EP Regulation prescribes the amount of FA required.

Certain other mining activities (mining claims, exploration permits and mineral development licences) are authorised

with standard conditions and eligibility criteria under the EP Act. The relevant publications are prescribed under the

EP Regulation and outline how the FA is to be calculated. These are:

Code of environmental compliance for exploration and mineral development projects (EM586)

Code of environmental compliance for mining claims and prospecting permits (EM587)

For all other activities requiring a decision on the amount and form of financial assurance (regardless of whether

they have submitted via a plan of operations or gone via an application process), the approved calculation method

is outlined in Appendix A. In summary this method involves:

Step 1: Calculate total (i.e. 100%) rehabilitation liability with respect to significantly disturbed land. The total

rehabilitation liability must first be calculated for the EA, for all significantly disturbed land, as per Appendix

A.

3 The department may ask for copies of quotes or contracted rates to validate applications or as part of ongoing compliance

activities. EA holders must keep records of current third party quotes and contracted rates.



http://www.ehp.qld.gov.au/licences-permits/compliance-codes/pdf/code-exploration-mineral-development-em586.pdf

http://www.ehp.qld.gov.au/licences-permits/compliance-codes/pdf/code-mining-claims-prospecting-permits-em587.pdf

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Step 2: If applicable, apply a discount. In recognition of the low incidence of non-compliance, low risk of

default, and good environmental performance/lower risk of environmental harm by some operators, the

department has adopted a discount system so that operators may reduce the amount of FA payable, to an

amount below 100% rehabilitation liability for significantly disturbed land. Access to the discount is subject

to mandatory pre-requisites and the amount of discount attainable is based on a number of criteria (e.g.

sound financial health, measures undertaken to reduce rehabilitation liability/risk of environmental harm

etc.). These are listed in Appendix B.

Step 3: Calculate proposed FA. The final FA can be calculated by subtracting the discount amount from the

100% rehabilitation liability amount.

Guideline



Decision stage

Criteria for deciding the amount and form of financial assurance

The department must decide the amount and form of FA with regard to criteria in a guideline made by the chief

executive and prescribed under a regulation. Refer to section 295 of the EP Act.

The following criteria must be considered for FA proposed under a plan of operations or an application*:

any relevant plan of operations or other rehabilitation plans for the EA

any relevant report, evaluation, assessment or statement of compliance for the EA

any relevant standards or rehabilitation requirements such as conditions of the EA

any relevant progressive rehabilitation applications and/or decisions for the EA

any relevant enforcement action or notices about rehabilitation or past environmental performance

supporting information and assumptions used to calculate the FA

the submitted statement confirming that the FA has been calculated in accordance with the guideline

departmental policy (including financial policy) and any other relevant financial policy or legislation about

the acceptable form of FA (see below)

if a discount is sought, the mandatory pre-requisites and discount criteria outlined in Appendix B

if applicable, other relevant quotes or cost estimates for the work

if applicable, any compliance statement or declaration given about the environmental authority or in relation

to the discounts in Appendix B.

* These criteria also apply to decisions to approve or refuse an application to amend the FA—refer to the relevant

section of this guideline below for more information.

The form of financial assurance

The department may decide what form of FA is required. The EP Act, state financial legislation and departmental

policy inform the requirements for deciding the form of FA. The Financial Accountability Act 2009 and the Financial

Performance and Management Standard 2009 provide the requirements for how the state accounts for and

administers its finances. The department is responsible for managing its financial performance and minimising

financial liabilities and risks. It has a comprehensive Financial Management Assurance Framework (FMAF) and,

with advice from the finance, audit and governance expertise within the department, the Director-General and

Executive Management Group have a hands-on role in monitoring the budget and determining other financial

matters. This includes the form of FA. Departmental policy requires FA to be a financial institution’s undertaking in

the form of an unconditional, irrevocable and on demand guarantee.

The department has developed a pro forma which is available for download on the Queensland Government

Business and Industry Portal at http://www.business.qld.gov.au/business/running/environment/licences-

permits/financial-assurance-rehabilitation/financial-assurance-security-deposit. Alternatively, the department will

provide a copy to the applicant when a decision has been made about the amount and form of FA.

Cash may be accepted in limited circumstances, subject to approval by the department. The request to provide FA

in the form of cash should be identified as part of the application.



Guideline



Post decision stage—notification

The department must notify the EA holder, via an information notice, about the amount and form of FA within five

(5) days of making the decision. Refer to section 296 of the EP Act. To expedite the process of providing the FA

before activities are carried out, the department may also arrange to phone the EA holder to give verbal notification

of the decision (e.g. phone call). The notice will also include details on review and appeal as the decision is

appealable (refer to Schedule 2 Original decisions under the EP Act).

Lodgement of financial assurance

The correct place for lodgement will be specified in the information notice and depends on the type of activity being

carried out/proposed to be carried out—see below. The EA holder must give the total amount of FA before activities

can be carried out.

Lodgement for mining activities4

FA for mining claims, exploration permits, mineral development licences and mining leases must be lodged with

DNRM (either online or in person).

Lodgement for other resource activities

FA must be lodged in person at Level 3, 400 George Street, Brisbane QLD 4000 or via registered post to

Environmental Support Officer, Energy Assessment Unit, Department of Environment and Heritage Protection, PO

Box 2454, Brisbane QLD 4001.

Lodgement for prescribed ERAs

FA must be lodged in person with the relevant departmental regional office or via registered post to the relevant

officer.

4 Note: A single lodgement may be used to cover any security deposit under the Mineral Resources Act 1989 and the FA

required under the EP Act. This is only done for mining because of the combined administration arrangements whereby DNRM

holds FA and security under the respective Acts.

Guideline



4. Amending the financial assurance by application

The EA holder may apply to amend the amount and form of FA. Refer to section 302 of the EP Act. The processes

and requirements are outlined below.

Note: if a plan of operations exists (e.g. for activities under a mining lease or a petroleum lease) and FA needs to be

amended as a result of a change to significant disturbance, an amendment should be sought via an amended or

replacement plan of operations. Requirements for amending FA via an amended or replacement plan of operations

are outlined in section 289 of the EP Act.

Figure 2: Process for amending the financial assurance

Note: The request for a compliance statement is a step that may or may not be undertaken by the department after

the application is made. The statutory timeframe applies from the later of these steps (i.e. after application or after

giving of the compliance statement).

Application stage

(i) How to apply to amend the amount or form of FA

An EA holder may apply to amend the amount or form of FA. FA may also need to be amended in response to an

application for progressive rehabilitation, as a result of mandatory relinquishment under resources legislation or

some other change in activities which has changed the area of significant disturbance and thus the total

rehabilitation liability on-site. This change may result in an increase or decrease in FA. Where the proposed

changes will require an amendment to the EA, an amendment application form must be submitted, and the EA

conditions should be decided before the EA holder applies to amend the FA.

The application to amend FA must be made in the approved form, Application to amend or discharge the financial

assurance held for an environmental authority (EM875). The application should be lodged with the relevant regional

office for the EA.

(ii) Information requirements

If the approved form is incomplete or the application does not include this information, the department may not

accept the application. For the purposes of sections 294(3)(b) and 303(d) of the EP Act, the following information

must be provided with the application:

(a) explanation or reasons for the change (e.g. change in disturbance, new standards, revised quotes, etc.)

(b) any changes to the existing period that has been nominated for the FA (total period must not be more than

five years)

(c) proposed new amount of FA compared to existing amount held

(d) if the change is due to a change in disturbance, the revised rehabilitation program including the nature,

staging and areas of proposed rehabilitation works

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(e) if the change is due to a change in disturbance, details of any change in the area or type of disturbance

proposed, including a comparison to the disturbance area identified in the existing rehabilitation plan. This

includes details and area of any land that has been progressively rehabilitated in the previous period

(f) supporting information to show how FA has been calculated, such as the electronic worked version of the

FA calculator and background calculations; updated list of third party suppliers and contracted rates or if

applicable, the Schedule of Disturbance (available on the Queensland Government Business and Industry

Portal at http://www.business.qld.gov.au/business/running/environment/licences-permits/financial-

assurance-rehabilitation/financial-assurance-security-deposit)

(g) if applicable, information required in order to demonstrate eligibility for a discount, including any necessary

declarations, reports and/or other supporting documentation (refer to Appendix B).

(iii) Compliance statements

The department may require a compliance statement to be lodged after receiving an application to amend FA. For

example, this may occur when a discount is being applied for or if the FA is proposed to be reduced. The statement

must declare the extent to which activities carried out under each relevant authority have complied with the

conditions of the EA and state whether or not the amount of the FA has been calculated having regard to the criteria

stated in this guideline (for example, the criteria in Appendix A and Appendix B). Refer to section 304 of the EP Act.

Decision stage

Criteria for deciding an application to amend FA

The department must decide whether to approve or refuse the request to amend FA. The department, when

deciding whether to approve or refuse an application to amend FA, must have regard to the same criteria that are

used when deciding the amount and form of FA.

Notification

The department will issue an information notice about the decision if the application is refused and will include

details on review and appeal as the decision is appealable (refer to Schedule 2 Original decisions under the EP

Act). If the decision is approved, the department will provide written advice of the new requirements. Refer to

section 305 of the EP Act.


The same lodgement arrangements outlined in Section 3 of the guideline (above) apply.



Guideline



5. Requirement to change or replenish the financial assurance

The department may, at any time, require the holder of the EA to change the amount of FA, or replenish their FA.

Refer to sections 306 and 307 of the EP Act. There are different processes and requirements, depending on the

situation. These are outlined below.

Figure 3: Process for changing or replenishing the financial assurance

Notification and submissions stage

Administering authority can change the amount of FA required

When FA has been given for an EA, the department may, at any time, require the holder of the EA to change the

amount of FA. The following is a list of examples where the department may review the amount of FA and decide to

require a change to the amount of FA held. It may be in response to:

an amended EA resulting in a change in disturbance

a progressive rehabilitation report associated with an application for progressive certification

a report from a compliance inspection, annual return, environmental audit or similar

information that has identified materially false or misleading declarations were made.

The department must issue a Notice of the Proposed Change under section 306 and invite submissions from the

EA holder. The submission period is 20 business days.

Decision stage

Once the submission period has ended, the department must consider any submissions and issue an information

notice about the final decision. Whilst the EP Act provides that the requirement can take effect once the holder has

been given the notice, the department can nominate a later date in order to provide more lead time for the EA

holder to meet their requirements. The department has adopted an administrative policy of 20 business days after

the decision has been made as the date of effect. This timeframe is considered reasonable as it gives the EA holder

four weeks from the time the notice is given to organise the new FA (e.g. contact and negotiate with financial

institutions for a guarantee etc.). This means, at least eight weeks pass from the time an EA holder is notified about

the proposed change to the time the requirement takes effect. If the amount is not given within the timeframe, the

department may review whether the EA holder is in non-compliance with their information notice or EA condition.

Refer to section 306 of the EP Act. The notice will also include details on review and appeal as the decision is

considered an original decision under the EP Act (refer to Schedule 2 Original decisions under the EP Act).

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Administering authority can require FA to be replenished

When FA has been given for an EA that is still in force, and all or part of the FA has been realised, the department

must give the EA holder a notice directing them to replenish the FA within 20 business days. The objective of this is

to bring the FA balance back up to the rightful amount. Refer to section 307 of the EP Act. It is a condition of the EA

that the holder must comply with the direction. Failure to replenish FA may be treated as a breach of condition and

could result in a heavy penalties or action to suspend or cancel the EA. Refer to sections 278 and 430 of the EP

Act.


The same lodgement arrangements apply as above, relating to a decision about the amount and form of FA.

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6. Discharging financial assurance

Figure 4: Process for discharging the financial assurance

Note: The compliance statement is a step that may or may not be required by the department. The statutory

timeframe applies from the later of these steps (i.e. after application or after compliance statement). However if

there is a transfer application, the decision may be withheld for a longer period, until the transfer is approved,

new FA is given and the transfer is effective.

Application stage

Holder can apply to discharge FA

The EA holder may apply to discharge the FA. The application may arise from a transfer or surrender of an EA

or from cessation of a small scale mining activity. Refer to section 302 of the EP Act. As per section 303, the

current EA holder (transferor) must complete the application in the approved form, Application to amend or

discharge the financial assurance held for an environmental authority (EM875). The application should be

lodged with the relevant regional office for the EA.

Information requirements

An application to discharge FA should refer to the approved form only. There are no additional information

requirements in this guideline. If the application is related to an application to surrender an EA, sufficient

information will be provided in the Application to surrender an environmental authority (EM796). If the approved

form is incomplete or the application does not include the above information, the department may not accept the

application.

Compliance statements

The department may, after receiving an application to discharge FA, require a compliance statement to be

lodged for a resource activity. The statement will outline the extent to which activities carried out under each

relevant authority have complied with the conditions of the EA. Refer to section 304 of the EP Act.

Decision stage

Criteria for deciding an application to discharge FA

The administering authority must decide whether to approve or refuse the request to discharge FA. Section 305

of the EP Act states that the department, when deciding whether to approve or refuse an application to

discharge financial assurance may only approve an application to discharge a FA if the authority is satisfied that

no claim is likely to be made on the assurance. This is the only legislative criteria for discharging FA.

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If an application to discharge FA coincides with an application to surrender the EA (section 264), the department

may consider the final rehabilitation report along with other documentation. The final rehabilitation report

includes information about compliance with conditions of the EA, the extent of rehabilitation, ongoing

environmental management and monitoring requirements, environmental risks and residual risks. The

department may also consider the final decision on the surrender application and any residual risk payment

requirements made under section 271 of the EP Act. If there is a transfer application, the decision on

discharging FA given by the transferor may be withheld until the transfer is approved, new FA is given by the

transferee and the transfer is effective.

Discharge FA

Notification

The department will advise the EA holder in writing about the decision to discharge FA. Refer to section 305 of

the EP Act. The advice will also include details on review and appeal as the decision is appealable (refer to

Schedule 2 Original decisions under the EP Act). DNRM (for mining) or the department (for all other activities)

will then discharge the amount of FA owing to the applicant.

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7. Claiming financial assurance

Figure 5: Process for claiming the financial assurance

Notification and submissions stage

The department may decide to claim FA if it incurs or might reasonably incur costs or expenses in taking action

to prevent or minimise environmental harm, restore the environment or secure compliance with an EA (in-force,

cancelled, surrendered) for which FA has been given. It is important to note that, while the amount of FA held is

determined on the basis of rehabilitation liability, this does not prevent the administering authority from making a

claim on FA to recover costs or expenses that it incurs in taking action to prevent or minimise environmental

harm arising from an incident that occurs on site. Before making a claim on financial assurance the department

must give written notice of the intent to claim, provide a period for submissions to be made and then consider

those submissions when making the final decision. Refer to sections 297–301 and 344A–344C of the EP Act.

Decision stage

If the department decides to claim part or all of the FA, it must issue an information notice about the decision.

The notice will also include details on the holder’s review and appeal rights as the decision is considered an

original decision under the EP Act (refer to Schedule 2 Original decisions under the EP Act).

Claim FA

Once the decision to claim is confirmed and communicated, the department will access the cash deposit (if

cash) or request funds from the Financial Institution under the terms of the Guarantee. The department will

utilise funds to commence work for the specific FA site.

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8. Financial assurance for transitional environmental programs

A transitional environmental program (TEP) is a specific program that reduces environmental harm by

identifying a program to bring an activity up to the standards specified in a relevant EA. The department may, by

condition of a TEP, require the holder of the EA to give FA as security for compliance with the program and

costs or expenses. Refer to section 339 of the EP Act.

Figure 6: Financial assurance for a transitional environmental program

Requirement for TEP

Applicants should discuss the likelihood of a FA condition being imposed during discussions with the

department prior to submitting a draft TEP. If it is likely that FA will be required, the amount of FA should be

proposed as part of the TEP to avoid delays in the assessment of the draft program. The department may, by

written notice, also request information about of FA (refer to s 334A). If a condition to impose FA is made, the

condition must also require the giving of the FA before activities under the TEP commence.

Notification

The department will issue a decision notice within 8 business days of making the decision (refer to s340) and

will also note the existence of the TEP on the EA (refer to s343A).


FA must be lodged as per the requirements in the decision notice. All FA for TEPs (i.e. including FA related to

mining) is to be lodged with the department. Once accepted by the department, activities may commence.

Discharge FA

At the end of the period over which the program is carried out, the department must discharge the FA (refer to

section 344D).

Further information can be found in the guideline for TEPs on the departmental website

http://www.ehp.qld.gov.au/management/compliance-guidelines.html.

http://www.ehp.qld.gov.au/management/compliance-guidelines.html

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9. Glossary

Contracted rates Contracted rates provided by the EA holder must:

be from a service provider who is a separate legal entity to the EA holder, and

who is appropriately qualified and experienced to safely and competently do

the works

reflect the true cost to government (not the EA holder) to commission the

works and include all EA holder supplied costs (costs that have been

subsidised by the EA holder) e.g. diesel, accommodation, access to site

workshops

include the technical specifications, scope of works and schedule of rates and

should be clearly itemised to reflect a detailed breakdown of works involved

(e.g. cost/machinery hire, labour, materials, etc.)

be from a formal written contract awarded and executed in the previous 12

month period from the date of the FA application

be for the site the FA application relates to.

Decommission To close down (a facility, as a power station, sewerage plant, etc).

Environmental

authority (EA)

Means an environmental authority issued by the administering authority under Chapter

5 of the Environmental Protection Act 1994.

Final rehabilitation

report

A final rehabilitation report prepared by or for an environmental authority holder, under

the Environmental Protection Act 1994. The report assesses the extent to which the

environmental conditions and any additional conditions of the environmental authority

have been met. It is associated with an application to surrender an environmental

authority.

Infrastrucuture Includes built facilities and services associated with the operations of the authorised

activities (e.g. processing plants, sewage treatment plants, power plants, camps,

offices, power poles, sheds, workshops and other built structures).

Plan of operations Is a planning document required under the Environmental Protection Act 1994 which

must be submitted to the administering authority prior to carrying out activities on a

mining or petroleum lease. The plan contains information about where activities will be

carried out, an action program which demonstrates how the holder of the

environmental authority will comply with conditions, a rehabilitation program and a

proposed amount of financial assurance.

Prescribed ERAs A prescribed ERA is an environmentally relevant activity prescribed under section 19 of

the Environmental Protection Act 1994. A list of prescribed ERAs appears at Schedule

2 of the Environmental Protection Regulation 2008.

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Progressive

certification

Progressive certification occurs when the administering authority certifies that a

particular area has been rehabilitated under all relevant requirements of the

Environmental Protection Act 1994 and the environmental authority.

Progressive

rehabilitation report

A progressive rehabilitation report is prepared by or for an environmental authority

holder, under the Environmental Protection Act 1994. The report assesses the extent

to which the environmental conditions and any additional conditions of the

environmental authority have been met. It is associated with an application for

progressive certification.

Residual risk

payment A requirement made under the Environmental Protection Act 1994 for the payment of

funds to cover the residual risk of environmental harm occurring after an environmental

authority for a resource activity has been surrendered, an application for progressive

certification has been given or when a site management plan for contaminated land

has been recorded on the contaminated land register.

Resource activities Section 107: A resource activity is:

(a) a geothermal activity

(b) a GHG storage activity

(c) a mining activity

(d) a petroleum activity.

Significantly

disturbed land

Refer to section 4 of the Environmental Protection Regulation 2008. Land that is

contaminated or has been disturbed and human intervention is needed to rehabilitate

it. For the purposes of this guideline, this includes activities that may result in:

clearing vegetation

negative effects on the viability of root quality

stability of mature vegetation

negative effects on soil structure and soil quality

removal or disturbance of habitat features such as ground cover and fallen or

hollow vegetation to an extent that the viability of the habitat is reduced

introduction or spread of invasive plant or animal species

bank instability

erosion and sedimentation to land.

Standard,variation

or site-specific

applications

A standard application for an environmental authority is one that can comply with the

eligibility criteria that are prescribed under the Environmental Protection Regulation

2008 and the standard conditions as notified in the gazette. A variation application is

one which can comply with the eligibility criteria but not all standard conditions. If the

eligibility criteria can’t be complied with, an application must be site-specific. Refer to

sections 121 - 124 of the Environmental Protection Act 1994.

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Third party quote A third party quote must:

be prepared by a service provider who is a separate legal entity to the EA

holder and who is appropriately qualified and experienced to safely and

competently do the works or estimate the cost of the works

reflect the true cost to government (not the environmental authority holder) to

commission the works and include all EA holder supplied costs (costs that

have been subsidised by the EA holder) e.g. diesel, accommodation, access

to site workshops.

be valid for the duration of the plan of operations or relevant disturbance

period within which FA is being calculated

include the technical specifications, scope of works and schedule of rates and

should be clearly itemised to reflect a detailed breakdown of works involved

(e.g. cost/machinery hire, labour, materials, etc.).

be calculated within the previous 12 month period from the date of the FA

application.

Transitional

environmental

program

A transitional environmental program (TEP) is a specific program that reduces

environmental harm by identifying a program to bring an activity up to the standards

specified in a relevant EA, development approval, or a prescribed condition for a

prospecting permit.

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Disclaimer:

While this document has been prepared with care it contains general information and does not profess to offer

legal, professional or commercial advice. The Queensland Government accepts no liability for any external

decisions or actions taken on the basis of this document. Persons external to the Department of Environment

and Heritage Protection should satisfy themselves independently and by consulting their own professional

advisors before embarking on any proposed course of action.

Approved by: Enquiries:

Jim Reeves Director-General Department of Environment and Heritage Protection

4 March 2016

Permit and Licence Management Phone: 1300 130 372 Fax: (07) 3330 5875 Email: [email protected] Website: www.ehp.qld.gov.au

Version history

Version Effective date Description of changes

1.00 31 May 2013 Converts former administrative FA Guideline to statutory FA Guideline and incorporates Greentape Reduction Act 2012 streamlining initiatives which apply across the resources sector and prescribed ERA’s.

2.00 7 March 2014 Revises discount system and introduces EHP FA calculator.

3.00 4 March 2016

Publication number changed from EM1010 to ESR/2015/1758.

Excludes GST from FA calculations, introduces contracted rates and clarifies requirements for suitable infrastructure, prescribed ERAs and industry calculators.

mailto:[email protected]

Guideline



Appendix A – Approved calculation method

The following methodology applies to mining leases, other non-mining resource activities and prescribed

environmentally relevant activities (e.g. landfills, quarries).

The department has developed a mining and a petroleum and gas FA calculator to help facilitate consistency in

calculating FA. The calculators can be downloaded from the Queensland Government Business and Industry

Portal at http://www.business.qld.gov.au/business/running/environment/licences-permits/financial-assurance-

rehabilitation/financial-assurance-security-deposit.

EA holders who calculate their FA using the departmental FA calculator will find that the assessment of their FA

application is significantly streamlined.

EA holders that do not calculate their FA using the departmental FA calculator can still achieve a streamlined

assessment of their FA if they have previously had their calculator recognised by the department. Industry

calculators can achieve recognition if they follow the recognition process outlined below in Part 2.

All other industry calculations will undergo a complete assessment which may include the department

comparing the industry calculation of FA against the departmental calculator values.

Regardless of which type of calculator is used, all FA calculations must follow the steps outlined in Part 1 below.

Part 1: Criteria for Calculating Financial Assurance

Step 1: Calculate 100% rehabilitation liability

The total rehabilitation liability reflects the total potential costs to rehabilitate significantly disturbed land, in a

way that will ensure compliance with environmental conditions of the EA. The total rehabilitation liability must:

be calculated on a project basis (i.e. may cover several activities on one or more resource authorities)

be calculated for all land that has been or is proposed to be significantly disturbed

be based on the rehabilitation costs for the year in which the maximum liability is incurred within the

nominated disturbance period5

costs must be a site-specific independently certified, third party quote or a contracted rate to undertake

the full extent of work necessary to meet all EA conditions including the following activities:

(a) decommission and remove all infrastructure and terminate all services6

(b) constituent tasks or activities required for rehabilitation

(c) project management7 costs (10% of the total rehabilitation liability is recommended)

8

5 The disturbance period provides for a regular review in recognition of the variable nature of disturbance (e.g. due to

activities expanding or being progressive rehabilitated) and the subsequent rehabilitation liability. If this period is less than

1 year, FA should be calculated based on the maximum rehabilitation liability within the nominated disturbance period.

6 Note: Some costs may not need to be included for certain suitable infrastructure if the EA holder can provide a written

agreement (between the EA holder and the land owner) or a statement (if the EA holder is the underlying landowner) that

the infrastructure can remain onsite and can demonstrate that the retention of the infrastructure is consistent with achieving

the general rehabilitation goals of a site that is safe to humans and wildlife, non-polluting, and stable. Examples of suitable

infrastructure include bores, clean water dams and access roads. This does not negate the need to obtain any other

authorisations as required under the EP Act or other legislation.

7 This reflects the costs to government to project manage, schedule or oversee the required works.



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(d) maintenance and monitoring9. It is recommended that 5% of the total rehabilitation liability be

added to account for maintenance and monitoring costs. In some circumstances it may be

appropriate to determine actual maintenance and monitoring costs rather than applying 5%9. An

example is where maintenance and monitoring costs are likely to account for more than 5% of the

total rehabilitation liability for the site, for instance where rehabilitation on a site has been

substantially completed, but not progressively certified10

,

(e) if the project produces hazardous contaminants or includes notifiable activities (in relation to

contaminated land), the cost of completing a site investigation report to verify that the conditions of

the environmental authority have been met

The total rehabilitation liability does not:

need to be calculated for disturbance authorised under an EA if FA has already been given under the

same or another EA and where there is colocation of infrastructure resulting in no change to the

rehabilitation activities or disturbance.

need to include rehabilitated areas certified under section 318Z of the Environmental Protection Act

1994.

include the costs of responding to an incident (e.g. a spill or accidental release to waters that has

downstream impacts).

The total rehabilitation liability must not:

assume that the liability can be reduced or offset by deducting the value of on-site infrastructure or other

assets (including scrap metal). This does not satisfy the requirements for an acceptable form of FA

(which must be unconditional; immediately payable on demand and payable without reference to

another person and available until all obligations have been performed). The department does not

accept this method due to risks and uncertainty associated with the department’s ability to inherit and

on-sell these assets and commercial factors (i.e. depreciation and saleability) which could affect the

value of the item.

Step 2: If applicable, apply the discount and then calculate proposed FA

In recognition of the low incidence of non-compliance, low risk of default, and good environmental

performance/lower risk of environmental harm by some operators, the department has adopted a discount

system so that operators may reduce the amount of FA payable, to an amount below 100% rehabilitation liability

for significantly disturbed land. Access to the discount is subject to mandatory pre-requisites and the amount of

discount attainable is based on a number of criteria (e.g. financial stability, measures undertaken to reduce

8 The EA holder may nominate an alternative amount for these components (or variable amounts across each itemised

activity). If the non-recommend value is used, quotes must then be attached with the application/information supplied to

the department. 9 This reflects the cost to government to do ongoing monitoring and maintenance required of rehabilitation works.

10 Progressive certification is a process outlined under section 318Z of the Environmental Protection Act 1994 and allows the

holder of an environmental authority to demonstrate that they have met all rehabilitation obligations. A certified

rehabilitated area does not require financial assurance.

Guideline



rehabilitation liability/risk of environmental harm etc.). The maximum allowable discount is 30%. The criteria are

listed in Appendix B.

Step 3: Calculate proposed FA

The final FA can be calculated by subtracting the discount amount from the 100% rehabilitation liability amount.

Part 2: Recognising industry calculators

EA holders that do not calculate their FA using the departmental FA calculator can still achieve a streamlined

assessment of their FA if they have previously had their calculator recognised by the department. In order to

gain confidence in a calculator, the department will need sufficient time to properly review its contents.

Industry calculators can achieve recognition if they follow the recognition process outlined below.

Step 1: Presentation of calculator to the department

EA holders should submit calculators to the department for recognition before making an application for a

decision on the amount and form of FA or using it to calculate FA as part of a Plan of Operations. The time that

it will take to assess a calculator will vary depending on its complexity. Experience has shown that it can take

upwards of three months to fully assess some of the more complex calculators.

The purpose and intent of presenting the calculator to the department is to:

demonstrate its functions and methodology to officers (i.e. aid familiarity and understanding of the tool which will build confidence in the method of FA calculation, prior to an FA calculation being submitted for assessment;

obtain formal recognition that the calculator complies with the approved calculation method as laid out in this guideline. This will streamline the FA application process by reducing the level of assessment that is needed in the official statutory timeframes.

This should be the relevant regional office or if the calculator is used across multiple parts of Queensland, it is

recommended to approach the office from which most of the EAs are supervised and managed. The relevant

regional office can facilitate meetings to ensure the right combination of staff are in attendance (i.e. depending

on the region/s in which the company operates).

It is recommended that a presentation be provided for each substantive revision of the calculator so as to outline

any changes, provide a refresher to staff and familiarise new staff. This will facilitate the recognition of

subsequent versions of calculator.

Step 2: Statement of Recognition

After the presentation of the industry calculator to staff, the department will check the calculator against the

requirements of Appendix A, Part 1, Step 1. The following lists some key features that a calculator will need to

include in order to satisfy these requirements and obtain a statement of recognition:

Clear identification of all domains / types of disturbance associated with the project(s) for which it will be used.

Clear identification of all rehabilitation activities required for each of type of disturbance identified (including decommissioning and removal of all infrastructure and services, and contaminated land investigations). The disturbance and rehabilitation work must be consistent with requirements of the environmental authority and other relevant documents such as a Plan of Operations.

The calculator should clearly identify the year to which the FA calculations apply. The method that the EA holder will use to determine the year of maximum liability within the nominated disturbance period (if more than 1 year) should be stated.

The unit costs and methods used to calculate rehabilitation liability for each area of disturbance must be reasonable and clearly explained. It should be confirmed that the rates provided reflect current pricing.

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Note: Unit costs can be reviewed without the need for a new statement of recognition provided that the EA holder provides an explanation of changes when FA calculations are submitted.Any assumptions that will be made when using the calculator must be clearly stated (e.g. the reasons and justification for the rehabilitation methodology proposed where there are multiple options).The intended scope of use for the calculator should also be clear; i.e. whether it will be used for one project or multiple.

If the calculator is intended to be used for multiple projects, the following will also need to be demonstrated:

i. That rehabilitation rates are applicable to each of the sites for which the calculator will be used. The calculator may include options (similar to the department’s FA calculators) that enable some rates to be itemised based on haulage distances (e.g. to source materials for rehabilitation, to dispose of wastes, or to determine mobilisation costs for equipment).

ii. The extent and method of rehabilitation work that can be input to the calculator is sufficient to meet EA requirements for each site.

The department must be satisfied with the rehabilitation methodology proposed and costed for FA calculations.

In determining whether a proposed rehabilitation methodology is acceptable, the department may take into

consideration the results of any predictive studies that assess the likelihood of success of proposed

rehabilitation methods. This may be particularly relevant to waste rock dumps containing acid-generating

material, tailings storage facilities, or brine / solid salt residues, where rehabilitation methods or disposal options

require further investigation or site-specific trials.

If the department is satisfied that the calculator meets the above requirementsit can provide a Statement of

Recognition to acknowledge acceptance of the calculator. The statement can be in the form of a letter on

departmental letterhead and can be used in subsequent dealings/applications to aid acceptance of the

calculator each time. Once an EA holder receives their statement, they can submit it with their FA application.

The statement should be specific to a version of the calculator. Substantive revisions would need to obtain a

new statement (notification of changed costings with an accompanying explanation is sufficient and would not

trigger a need for a new statement).

Step 3: Declaration of version

When an EA holder submits their proposed FA calculations using a recognised industry calculator, they will be

required to declare that the calculation methodology and the rates used in the submission have not changed

from the calculator presented to, and recognised by the department, and that the rates are appropriate for the

nominated disturbance period. This declaration will be integrated into the declaration that already exists in the

application for deciding the amount and form of FA. If the calculator relates to a lease, it is recommended that a

statement be included in the Compliance Statement.

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Page 28 of 33 • EM1010 • Version 3 Department of Environment and Heritage Protection

Appendix B – Discount system

1. Discounts for small scale mining activities and other small mines.

This discount system does not apply to small scale mining activities and other mining activities that are eligible ERAs

11. The amount of financial assurance required for these activities is stated in standard conditions and

cannot be discounted.

2. Discount system for mining lease with standard conditions and eligibility criteria

For mining leases subject to eligibility criteria and standard conditions, the discount arrangements are contained

in the Continued Code of Environmental Compliance for Mining Lease Projects (EM588). This is prescribed in

Schedule 3 of the Environmental Protection Regulation 2008.

2. Discount system for all other activities

A discount will apply to the gross FA liability for an EA, where the EA holder can demonstrate that it meets all

mandatory pre-requisites (listed in Table 1 below) and the discount criteria (outlined in Tables 2-4 below) which

are relevant to the discount they are applying for.

The discount system is EA specific, meaning that any requirements which must be met and any discount that is

applied only relate to the EA in question. For example, if a mandatory pre-requisite is not met because the EA

holder has not complied with certain EA conditions, a discount cannot be applied to that specific EA. However, a

discount can still be applied for in relation to other EAs held by the same EA holder.

If a discount is achieved, it applies only for the FA period nominated by the EA holder. At each new FA period,

the EA holder will need to demonstrate it meets the mandatory pre-requisites and discount criteria, otherwise

the amount of FA needed will revert to its undiscounted value. In some cases there are also annual reporting

requirements.

Mandatory Pre-requisites

The mandatory pre-requisites outlined in Table 1 are benchmarks that each EA must meet in order to apply for

any subsequent discounts.

Discounts

11 An eligible ERA means an environmentally relevant activity under the Environmental Protection Act 1994 that

complies with the eligibility criteria in effect for the activity and that is not carried out as part of a coordinated project.

Step 4

Submit Application with Supporting Information

Calculate total rehabilitation

costs ($)

The EA meets the benchmark criteria.

EHP to assess and decide the amount

Step 1

Calculate FA

Step 2

Meet Mandatory Pre-requisites

Step 3 Select

Discounts

Choose any

discount/s for a maximum total of

30%

Guideline



There are 3 discount categories and an EA holder may choose any discount to apply for, however the maximum

discount that can be awarded is 30%. The following explains the purpose of awarding discounts under each

category:

1. Financial (Table 2): This discount category provides a discount where an EA holder submits certified documentation to demonstrate sound financial health and a declaration that the costs of rehabilitation have been adequately budgeted for.

2. Progressive rehabilitation and certification (Table 3): This discount category provides a discount to EA holders that avoid impacting areas of remnant vegetation or where areas of significant disturbance are being proactively rehabilitated or revegetated.

3. Waste management (Table 4): This discount category provides a discount to an EA holder where they can demonstrate they are not undertaking significant high risk storage activities (waste rock dumps, tailings storage facilities, regulated dams, brine and landfill waste) or they have implemented measures that reduce the amount of waste that would otherwise be stored in onsite high risk storage activities.

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Table 1: Mandatory pre-requisites

Mandatory Pre-requisites

General

FA must be calculated in accordance with Appendix A of the FA Guideline.

The EA condition must be worded in a way that triggers a recalculation of FA, where there is an increase to the FA as

a result of an event or change in circumstance (i.e. once the discount for the nominated FA period runs out or where

the EA no longer meets the mandatory pre-requisites or applicable discount criteria).

Financial Standing

The EA annual fees must be up to date.

The EA holder must be solvent and not in external administration (i.e. liquidation, voluntary administration, under

supervision of a court-appointed trustee). Supporting information to provide evidence that the EA holder is solvent (for

example, attaching a company search from the ASIC company register or if the EA holder is a joint venture, copies of

participating company searches or equivalent searches; or if the EA holder is incorporated in another jurisdiction,

copies of relevant company searches from equivalent registers).

Environmental Performance

In the previous FA period, the EA holder must have complied with or achieved any historical discount obligations.

In the past 2 years, an EA holder must not have had a relevant compliance action* in relation to the following EA

conditions:

o Conditions that set limits on disturbance;

o Conditions that limit the release of contaminants to water or land; or

o Conditions around rehabilitation requirements.

*relevant compliance action means, for the relevant environmental authority, the issue or occurrence of:

3 or more Penalty Infringement Notices (under the State Penalties Enforcement Act 1999 / Environmental Protection Act 1994)

an environmental protection order

a Transitional Environmental Program (TEP). Note: voluntary TEPs relating to approved water releases from 2011 floods, where operators are transitioning from Special Agreement Acts or where EA holders are phasing out evaporation dams are an exception to this rule)

a cost recovery notice (which has not been fully paid and is still is in effect (e.g. not withdrawn)

a direction notice

a proceeding or conviction for an environmental offence or a notice offence

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Table 2: Financial discount

Discount Description Discount Criteria

1. Financial

A 10% discount for demonstrating

sound financial health and adequate

budgeting for the scheduled

rehabilitation in the upcoming FA

period.

To determine eligibility, the EA holder must provide:

The previous year’s annual financial statements, which have been audited by a suitably qualified financial auditor*. This will be assessed for evidence of a sound financial position.

A declaration* stating that: 1. The information provided is accurate, complete and not misleading; 2. the costs of scheduled rehabilitation (in the upcoming FA period) have been budgeted for; and 3. the entity can pay its debts if and when they fall due..

To maintain eligibility, the EA holder will need to submit the above statements for each remaining year of the FA period. The department will use this information to review and monitor eligibility for the discount.

* suitably qualified financial auditor means someone who is a member of the Institute of Chartered Accountants or Certified Practicing Accountants.

* the declaration must be completed in the required departmental pro-forma document (EM1266).

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Table 3: Progressive rehabilitation and certification discount


2. Progressive rehabilitation & certification

(AVOID) A 10% discount for avoiding

any impacts to remnant vegetation.

The EA holder provides a map of the tenure to show remnant vegetation (as mapped under the Vegetation Management Act 1999) has been identified.

The EA has a condition that does not authorise impacts to remnant vegetation.

Note: Any amendment to the EA to allow impacts to remnant vegetation will forfeit this discount.

(STABILISE) A 10% discount for

undertaking proactive rehabilitation

work to reduce the total area of

disturbance (irrespective of final land

use).

In the previous FA period, the EA holder completes earthworks and soil stabilisation (irrespective of final land use) for an area that is 10% of the total area of disturbance (minimum of 1 ha).

A plan of operations (or equivalent) outlines total area of disturbance and a rehabilitation report which outlines the completed works and how it is compliant with EA rehabilitation outcomes (suitably qualified person to sign off). Note - total area of disturbance includes all disturbance, regardless of whether it is ‘permanent’ or ‘unavailable for rehabilitation’ at that particular point in time.

Note: In order to access this discount the EA needs to have rehabilitation outcomes that require the area to be a non-polluting and stable landform with covering that provides appropriate erosion and sediment control (e.g. areas of rehabilitation must be geophysically and geochemically stable).

(RESTORE) A 10% discount for

undertaking proactive revegetation of

a woody regional ecosystem.

In the previous FA period, the EA holder demonstrates that 10% of total area of disturbance (minimum of 1 ha) has been revegetated with a woody Regional Ecosystem (RE) - non-grassland RE as defined in the Vegetation Management Regulation 2012).

Revegetation must include all required species having been seeded/planted and that the area has undergone 2 years of maintenance and monitoring.

A rehabilitation report outlining the work completed and how that work is in accordance with EA revegetation outcomes (suitably qualified person to sign off that only maintenance and monitoring is needed).

Maintenance and monitoring is to continue at least until the end of the next FA period.

Note: In order to access this discount the EA needs to have revegetation outcomes that define what quantum of vegetation species are required (e.g. areas of revegetation must include 70% of the regional ecosystem vegetation species).

(CERTIFY) A 10% discount for

progressive certification.

An area previously receiving a discount for rehabilitation or an area that is 10% of the total area of disturbance has been

certified as per section 318Z of the EP Act, irrespective of final land use.

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Table 4: Waste management discount


3. Waste management

(LOW RISK) A 10% discount for only

undertaking activities that are

considered to have a low

environmental risk.

The EA holder has a non-mining EA approved via a standard or variation application (or a conversion application) and has not

amended the eligibility criteria and standard conditions in regard to high risk storage activities*.

(HIGH RISK) A 10% discount for

undertaking activities that reduce the

amount of waste stored onsite (10%

discount for each waste

management measure).

EA holder demonstrates they have undertaken measures which have reduced (for each year in the previous FA period) annual

waste disposal by the minimum amount specified in the below Performance Outcome column (as relevant to the type of waste

being disposed) that would otherwise have been stored onsite in a high risk storage activity.

Performance Outcome Acceptable Solution (examples)

o 10% of waste rock i. The waste rock was used to backfill an opencut or underground void.

o 10% of brine waste water i. The brine waste water was injected into a deep geological storage formation.

o 20% of tailings waste i. The tailings were thickened and used to backfill an opencut or underground void.

o 30% of landfill waste i. The landfill waste was sorted with 30% found as recyclable material

o 50% of waste water i. The waste water was re-injected into an aquifer

ii. The waste water was beneficially used

* high risk storage activities are waste rock dumps, tailings storage facilities, regulated dams and landfill sites.

Note: Reducing waste already disposed in storage can be counted. Disposal offsite (i.e. not for reuse/recycling) at a waste

disposal facility will not qualify as a measure. All measures will need to have been approved on the EA or on a BUA and already

in operation to receive the discount.

Documents

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